Data from the London Metal Exchange, a global industrial metals trading website, showed cobalt, a main material used in lithium-ion batteries, has doubled in price since January 2016 (see the graph), the fact might put pressure on electric vehicle makers.
The international price of cobalt rose to $55,000 per tonne in early April this year, which is twice as much as the price recorded in the beginning of last year, around $24,000 per tonne.
Cobalt is “being bought on the anticipation of increasing demand for use in electric vehicles”, according to an official source at a major trading house in Japan.
The contract price of lithium has risen about threefold compared to two years ago in China, whose market is an international benchmark for the metal, sourced economic news publication Nikkei Asian Review.
The source added rare metals have surged due to supply chain concerns as a result of the increasing demand of electric vehicles.
Cobalt is a byproduct of nickel and copper, but supply is falling as mining companies roll back production due to a sluggish copper market and stronger environmental regulations.
Some are also worried about instability in the Democratic Republic of Congo, which is a major producer of cobalt.
Reducing costs of batteries has been seen from market movements. The Gigafactory in Nevada, operated by Tesla and Panasonic, is hoping to lower the cost by mass producing batteries for Tesla’s Model 3 vehicle.
Source from Japan claimed cobalt accounts for about 20% of the components cost for batteries. Domestic battery manufacturers are worried that a further price rise could make it difficult to procure materials and lead to delays in development.
Credit: London Metal Exchange